DOD gears up for Round 2 of sequestration

Opponents of last year’s across-the-board spending cuts are hoping — perhaps quixotically — that sequestration’s second verse won’t be the same as its first.

Now that a bipartisan deal has ended the government shutdown, the resulting budget conference committee is the new best hope for turning off the cuts that have hit the Pentagon and defense industry hard and threaten to get even worse.

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But even though the latest chapter in Washington gridlock is over, very little has actually changed.

“It’s important to note that Congress did not remove the shadow of uncertainty that has been cast over this department and our government much of this year,” Defense Secretary Chuck Hagel said Thursday during a press briefing at the Pentagon.

“The damaging cuts of sequestration remain the law of the land,” he said. “In the months ahead, Congress will have an opportunity to remove this shadow of uncertainty as they work to craft a balanced, long-term spending bill.”

Hagel urged lawmakers to give the Defense Department and its vast workforce stability and predictability after the ringer they’ve been through, including sequestration furloughs over the summer and then shutdown furloughs more recently.

The continuing resolution passed Wednesday and signed by President Barack Obama funds the government through Jan. 15, the same day the second round of spending cuts from sequestration is set to hit. Those cuts would set the Pentagon’s base budget at about $475 billion, which is roughly $20 billion less than the level in the CR and $50 billion less than DOD asked for in its fiscal year 2014 budget request.

Pentagon Comptroller Robert Hale warned on Thursday that the second round of sequestration would mean DOD needs to get smaller — certainly meaning fewer civilian workers and probably fewer uniformed military members.

“We will try to avoid reductions in force; we’ll keep them to an absolute minimum,” he said. “We would look to do this if we have to through attrition, but yeah, we’re going to have to get smaller, I just can’t tell you exactly how much.”

Wednesday’s shutdown deal leaves sequestration in place. But it also created a bicameral conference committee, headed by Republican Rep. Paul Ryan and Democratic Sen. Patty Murray, to come up with a plan by Dec. 13 to address the nation’s fiscal challenges.

But the panel is not another supercommittee and has no special authorities to leapfrog the committee process. Even if it did reach a deal for deficit reduction, it would still need to be debated and passed by both houses of Congress, said defense budget analyst Todd Harrison.

“There’s a narrow window of opportunity to try to deal with the sequester, but they will have to work fast and they’ll have to somehow miraculously bridge the divides and disagreements that they have not been able to do in the past two years,” said Harrison, a senior fellow with the Center for Strategic and Budgetary Assessments.

Ryan and Murray released a joint statement Wednesday expressing optimism at their ability to work together on budget reforms — but any discussion of details like sequestration was noticeably absent.

“We recognize the many differences between the House and Senate budget resolutions and the challenges we face in reaching an agreement,” Ryan and Murray said in the statement. “We hope to restore stability to the budget process and end the lurching from crisis to crisis.”

Republicans and Democrats have both said all along they want to resolve sequestration — but in different ways. Republicans want to make cuts elsewhere in the budget, including to mandatory programs such as Social Security and health care. Democrats say the best way to restore the Pentagon’s funding is with increased taxes.

Rep. Buck McKeon (R-Calif.), the chairman of the House Armed Services Committee and one of sequestration’s most vocal critics, will attempt to convince his fellow lawmakers in upcoming months that turning off the cuts should be part of the conference committee’s recommendations.

“Certainly you will not see him let up on his insistence that sequester be resolved and that military resources match the threat,” McKeon spokesman Claude Chafin said.

But some Senate Republicans claimed a victory in the final shutdown deal because they were able to keep spending at sequester levels — Minority Leader Mitch McConnell (R-Ky.) said on the floor Wednesday that keeping the cuts in place was a priority in negotiations for him and his conservative colleagues.

Sen. Orrin Hatch (R-Utah) praised his party’s ability to get Democrats to agree to lower spending levels on Thursday in an interview with Chuck Todd on MSNBC’s “Daily Rundown.”

“We were able to preserve sequestration, which of course has brought the deficit down from $1.3 trillion down to $700 billion,” Hatch said. “The president is taking credit for that, of all things. He hates sequestration. It’s the worst way to do things — but, nevertheless, it has worked so far.”